Lou Dobbs, wearing an American flag pin in his left lapel, introduced a segment on his CNN program last week with his trademark outrage. “Tonight, there is a new threat to national sovereignty and security: A foreign hedge fund trying to take control of CSX.”

Doing his best imitation of Howard Beale’s “I’m mad as hell” line — but with no sense of irony — Mr. Dobbs said of the foreign hedge fund, “Who the heck do they think they are?” At one point he proclaimed, “This has to go immediately to C.F.I.U.S.,” a reference to the Committee on Foreign Investment in the United States, as he contended CSX “is without question a national security asset.”

Mr. Dobbs, a vocal opponent of Dubai’s attempt to buy six American ports, is not the only one up in arms. Six members of the Senate Banking Committee are raising red flags too.

CSX is, of course, one of the largest railroad companies in the nation. And given all the hubbub, you’d imagine the hedge fund was based in the Middle East. But the hedge fund is — wait for it — based in London. Yes, London. The British are coming!

The Children’s Investment Fund Management, a hedge fund started by Christopher Hohn, a British money manager, that donates a portion of the fees it generates to charities like the International Rescue Committee and many H.I.V.- and AIDS-related projects.

That’s not to say the fund, known as TCI, is warm and cuddly: it takes activist roles and is sometimes a bit rough around the edges. Some critics even contend that the whole charity thing is a self-serving marketing gimmick to help soften its image.

But one thing TCI is not: a national security threat.

And yet somehow — well, it’s not a mystery, and we’ll get to that in a moment — CSX has managed to turn a proxy contest for 5 of 12 board seats (it is hardly a takeover, at least not yet) into a debate about national security. The six senators wrote a letter to the Treasury secretary, Henry M. Paulson Jr., last week suggesting, absurdly, that TCI is “anonymous and invisible to government regulators.”

The battle for control of five CSX board seats is a case study of a company’s executives grasping at straws to protect themselves. In a way, it is a very sad story. CSX’s management has actually done a pretty terrific job managing the company — its shares are up some 244 percent in the last three years. The rail industry returned 123 percent over the same period.

So it is hard to fault them and, frankly, even more difficult to see why TCI deserves a spot on the board. TCI, by the way, claims CSX can’t sustain the growth, which is perhaps true.

But when TCI came calling more than a year ago, CSX dismissed it as fast money seeking to squeeze the company for cash (which TCI is, whatever its altruistic mission). That may have been a fatal mistake.

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Now, more than a third of CSX’s stock is in the hands of hedge funds — through what CSX says was dubious and possibly illegal means. Both sides have gone to court, and the evidence of shenanigans on both sides doesn’t make either look good. TCI and another fund, 3G Fund, together have amassed an 8.7 percent stake in CSX. They also used a sophisticated swap strategy to hide their ownership of an additional 12.3 percent in a similar way to the approach I questioned earlier this year when Jana Partners took a large stake in CNet. At this point, CSX seems destined to lose the vote — unless it reaches a settlement with TCI first, which apparently it has already tried.

If there’s a lesson here, it is that boards and managements should engage early and often with their investors — even their tormentors. (Take a lesson from Richard D. Parsons of Time Warner in his fight with Carl C. Icahn.)

The saddest part is that CSX could have easily looked like the good guy but now seems like the bad guy, given the lengths it has gone to protect itself.

The column writes itself: CSX delayed its annual meeting — without first telling its shareholders — and then moved the meeting to a rail yard in the middle of nowhere, 15 miles outside of New Orleans. The company, by the way, is based in Jacksonville, Fla. (CSX contends it is using the meeting to show off a refurbished rail yard.)

What about all that support in Washington? The uproar is over the fact that in addition to transporting tens of thousands of other carloads last year, CSX also moved 9,575 military carloads as well as 312 carloads of nuclear material.

But take a look at where some of the senators and congressmen have been getting donations lately — and their pet projects — and the timing may seem a bit suspicious.

Two of the six senators who sent the letter — Mel Martinez of Florida and Tom Carper of Delaware — have been beneficiaries of CSX’s largess, receiving $5,000 each this year.

Representative Corrine Brown, a Democrat from Florida, who is chairwoman of the House subcommittee with jurisdiction over the rail industry, has been particularly vocal in trying to prevent TCI from getting on CSX’s board. She has received $38,750 since 1989, including $5,000 in the 2008 election cycle, from CSX, according to the Center for Responsive Politics. And CSX gave $25,000 to Edward Waters College, in Jacksonville, which gave her an honorary degree. And then CSX’s chief executive, Michael J. Ward, personally donated another $1 million to Edward Waters College just over a week after Ms. Brown spoke out on behalf of the company. He had never donated money to the college before and has no connection to the school.

Of course, everyone involved suggests it’s all just a big coincidence. Maybe Mr. Dobbs should look into it.

Correction: June 16, 2008

The DealBook column on Tuesday, about efforts by the railroad company CSX to keep a British private equity fund from winning control of some of its board seats, misstated the relationship of Representative Corrine Brown, a Florida Democrat who has spoken out on CSX’s behalf, to Edward Waters College in Jacksonville, Fla. Ms. Brown received an honorary degree from and has close ties to the college, which received $25,000 from CSX and $1 million from its chief executive, but it is not her alma mater.

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